Mills missed the point of single-payer health care system

I almost fell off my chair the other day while reading Stewart Mills’ comments in the Mesabi Daily News on the subject of single-payer health insurance. He chastised his opponent Rick Nolan for supporting a single-payer system—such as an extension of Medicare to serve all Americans.

He reminded me of that old saying that sometimes it’s best to remain silent and appear uninformed than to open your mouth and remove all doubt. In his comments, Mills stated that a switch to a single-payer system would decimate the insurance industry and cost countless jobs. He cited the Blue Cross/Blue Shield center in Virginia as one of the insurance centers that would disappear under a single-payer system. “It would collapse the system. It would cut out those traditional jobs in insurance,” Mills said.

Such comments reflect a gulf between Mills’ understanding and the reality of expanding Medicare. First, if every American enjoyed a basic level of health care coverage under a “Medicare for all” scenario, tens of millions of Americans would still choose to purchase supplemental policies, as do most seniors who currently qualify for Medicare. Those policies cover a wide range of services that are not covered or fully covered by Medicare, and opening Medicare to all Americans would significantly expand this sector of the private health insurance industry. While the health insurance industry, overall, would be smaller, it certainly wouldn’t disappear.

But Mills unwittingly highlights why the costs of health care are so high in the United States, compared to every other developed country in the world. There are a number of factors that contribute to the high costs, but one of the most significant is the extreme inefficiency of the current system of private insurance, which drains hundreds of billions of dollars a year that could be going towards patient care, and diverting it to administrative overhead and insurance industry profits. All of that money that pays for maintaining the vast health care insurance bureaucracy that Mills seems eager to protect comes at the expense of all of us, through higher premiums, paid either by individuals or businesses.

A 2003 report in the New England Journal of Medicine calculated that health care administration in the U.S. totaled at least $294 billion annually, or more than $1,000 for every man, woman, and child in the U.S. at the time.

By contrast, Canada, with its single-payer system, spends less than a third as much. Many other, more recent, studies have yielded similar conclusions. According to the Kaiser Family Foundation, administrative costs for the Medicare program, a single-payer system, run only about two percent, while administrative costs in the private insurance market run 15-17 percent. That’s true because of the complex nature of our private health insurance system, under which both U.S. health care providers and insurance companies spend far more on paperwork than they would under a single-payer system. All that paper-shuffling drains vast resources, adding to the cost of health care in America, without improving patient care at all.

Mills is apparently arguing that inefficiency and waste are good things, because we employ people doing administrative work that wouldn’t be necessary in a more sensible system. What Mills overlooks is that if we weren’t, as a country, spending hundreds of billions annually on insurance company account representatives and executives, we could be spending it on more doctors and nurses to provide care to all the additional Americans who would finally have real access to the health care system under a Medicare-for-all scenario. That’s supposed to be the objective of our health care system, after all, not enabling the growth of vast insurance company bureaucracies.

What Mills’ comments suggest is that he needs to brush up on basic economics, not to mention health care policy. Mills, who says he manages his family business’s health insurance plan has to be aware of the sharp increases in the cost of health insurance the country has experienced over the past 30 years. The rising cost of health insurance is sapping the competitiveness of American business, since their international competition invariably pays much less than U.S. firms. It’s a far bigger burden on most businesses than expenses like the corporate income tax. Rising costs had also made insurance unaffordable for tens of millions of Americans, which is why 20 percent of Americans could no longer afford coverage prior to implementation of the Affordable Care Act.

Mills, in other media comments, does make it clear he understands that health care costs are rising too quickly, and that the cost spiral is threatening the nation’s fiscal health. But his “solution” is to repeal the Affordable Care Act, which would cost millions of Americans their health insurance coverage as well as increase the cost of health care and the federal deficit. Mills avoids these realities by ignoring them. He says the ACA hasn’t expanded health care access or lowered costs, which is exactly contrary to reality. Nationwide, implementation of the ACA has reduced the percentage of Americans who are uninsured from 20 percent to 15 percent in the first year since the opening of the health insurance exchanges. Closer to home, 180,000 additional Minnesotans have insurance as a result of the ACA.

At the same time, it’s well documented that the health care cost spiral has slowed significantly in the past three years, and cost-saving measures that were a part of the ACA deserve at least some of the credit for that, according to many health care experts.

Mills even repeats the usual Republican line about the ACA— that it represents a government “takeover” of the health care sector. You hear this all the time from conservatives, and it’s just nonsense. The ACA, much to the chagrin of those who favor a Medicare-for-all approach, expressly maintains the private health insurance system that creates inefficiency in the system. While the ACA did add additional regulation of the insurance industry, it’s been regulated for decades and the changes are almost all for the good. One of the most significant is the rule that mandates that at least 85 percent of insurance premiums go toward actual health care, a rule that enforces a bit more efficiency into the system and helps keep premiums and industry profits under more control. But Mills, as his comments suggest, apparently opposes greater efficiency.

Contrary to Republican claims, the ACA is not a government takeover. Nor is Medicare, for which most Americans can’t wait to qualify. While Medicare is an efficient, single-payer system, it maintains the same doctor-patient relationship that has been the norm in the U.S. for over a hundred years. It remains the most cost-effective and efficient provider of health care access in the country, and it should be available to all. Rick Nolan is right about that.